Tag: questions

Posted on

Three Mindsets To Being A Great Venture Investor

compass, path, direction, future

“Readily available quantitative information about the present is not gonna give you they key to the castle. […] If everyone has all the company data today and the means to massage it, how do you get a knowledge advantage?

“The answer is you have to either:

  1. Somehow do a better job of massaging the current data, which is challenging; or you have to
  2. Be better at making qualitative judgments; or you have to
  3. Be better at figuring out what the future holds.”

Those are the words of the great Howard Marks on a recent Acquired episode.

When most of us first learned economics — be it in high school or college, we learned of the Efficient Market Hypothesis. In short, if you had access to both public and private information, you would be capable of generating outsized returns that outperformed the market.

The truth is that reality differs quite a bit. And that’s especially in early-stage investing. Investors often make investment decisions with both public and private information at their disposal. There is admittedly still some level of asymmetric information, but that depends on deep of a diligence the investors do. Yet despite the closest thing to a strong efficiency, there’s still a large delta between the top half and bottom half of investors. The gap widens further when you compare with the top quartile. And the top decile. And the top percentile. Truly a power law distribution.

Massaging the data

I’m no data scientist, although I am obsessed with data. But there are people who are, and among them, people I deeply respect for their opinion.

There’s been this relentless, possibly ill-placed focus on growth (at all costs) over the last two years. Oftentimes, not even revenue growth, but for consumer startups, user growth.

I want to say I first heard of this from a Garry Tan video. The job of a founder pre-product-market fit (pre-PMF) is to catch lightning in a bottle. The job post-PMF is to keep lightning in that bottle. Two different problems. Many founders ended up focusing on or were forced to focus on (as a function of taking venture money) scale before they caught lightning in that bottle. They spent less time on A/B testing to find a global maximum, and ended up optimizing for a local maximum.

Today, or at least as of September 2022, there’s this ‘new’ focus on retention and profitability (at all costs). But there’s no one-size-fit-all for startups. As a founder, you need to find the metric that you should be optimizing for — a sign that your customers love your product. Whether it’s the percent of your customers that submit bug reports and still use your product or if you’re a marketplace, the percent of demand that converts to supply. Feel free to be creative. Massage your data, but it still has to make sense.

From a fund perspective, equally so, it’s not always about TVPI, IRR, and DPI, especially if you’re an emerging fund manager. Or in other words, a fund manager who has yet to hit product-market fit. You probably have an inflated total-value-to-paid-in capital (TVPI) — largely, if not completely dominated by unrealized return. The same is true for your IRR as well. In the past two years, with inflated rounds and fast deployment schedules, everyone seems like a genius. So many investors — angels, syndicate leads, and fund managers — found themselves with IRRs north of 70% for any vintage of investments 2019 and after. Although an institutional LP that I was chatting with recently discounts any vintage of startups 2017 and after.

So the North Star metrics here, for fund managers, isn’t IRR or TVPI. It’s other sets of data. I’ll give two examples. For a fund manager I chatted with a few weeks ago, it was the percent of his portfolio that raised follow-on capital within 24 months of his investment because it was more than twice as great as the some of the best venture firms out there. Another fund manager cited the number of his LPs who invested in his fund’s pro rata rights through SPVs.

Making qualitative judgments

In this camp, these are folks who have an extremely strong sense of logic and reasoning. When a founder has yet the data to back it up, these investors go back to first principles.

In my experience, these investors are incredible at asking questions, like how Doug Leone asks a founder for their strengths and weaknesses. But more than just asking questions, it’s also about building frameworks and knowing what to look for when you ask said questions.

For instance, every investor knows grit is an important trait in a founder. More than knowing at a high level that grit is important, what can you do to find it out? For me, it boils down to two things.

  1. Past performance. In other words, prior examples of excellence that they worked hard to get.
  2. Future predictors. I ask: Why does this problem keep you up at night? Or some variation. Why does this problem mean so much to you? Why are you obsessed? Are you obsessed? Why is this your life’s calling? And I’m not looking for a market-sizing exercise here.

While I don’t claim to hold all the truths in this world, nor can I yet count myself in the highest echelons of startup investing, the most I can do here is share my own qualitative frameworks for thinking:

Futurists

One of my favorite thought pieces on the internet is written by a legendary investor, Mike Maples Jr. of Floodgate fame. In it, he illuminates a concept he calls “backcasting.” To quote him:

“Legendary builders, therefore, must stand in the future and pull the present from the current reality to the future of their design. People living in the present usually dislike breakthrough ideas when they first hear about them. They have no context for what will be radically different in the future. So an important additional job of the builder is to persuade early like-minded people to join a new movement.”

Early-stage investors must have the same genetics: the ability to see the future for what it is before the rest of humanity can. And they back founders who are capable of willing the future into existence and create reality distortion fields, a term popularized by Bud Tribble when describing Steve Jobs.

When I first jumped into venture, one of the first VCs I met — in hindsight, a futurist — told me, “Some of the best ideas seem crazy at first.” A visionary investor is willing to take the time to detect brilliance in craziness. Paul Graham, in a piece titled Crazy New Ideas, proposed that it’s worth taking time to listen to someone who sounds crazy, but known to be otherwise, reasonable because more than anyone else, they know they sound crazy and are willing to risk their carefully-built reputation to do so.

For 10x founders and investors alike, the more you hear them out, the more they make sense. That said, if they start making less and less sense the more you listen, then your time is most likely better spent elsewhere.

In closing

As you may already know, a great early-stage investor requires a different skillset than a great public equities trader or a hedge fund investor. You’re more likely to work with qualitative data than quantitative data. Regardless of what archetype of a venture investor you are, you have to believe that we are capable of reaching a better future than the one we live in today. It is then a question of when and how, not if.

Of course, I don’t believe that these three archetypes are mutually exclusive. They are more representative of spectrums rather than definitive traits. Think of it more like an OCEAN personality test than a Myers-Briggs 16 personalities.

To sum it all, I like the way my friend describes venture investors: pragmatic optimists. Balance the realities of today with how great the future can be.

Photo by Jordan Madrid on Unsplash

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.

Posted on

#unfiltered #70 Conviction Comes From The Stories We Tell Ourselves

focus, conviction, motivation

On the second half of a late summer Friday, as I was overlooking the singed blades of the parched grass in our front yard, I found my good friend, Andrew, in my inbox. An inbox that was about to be empty from filing an eclectic collection of investor updates, food science analyses, tech articles, and my weekly subscription of Substack extraordinaires into my Read Later folder.

An email headline in boldface. All it would take would be two clicks. Two clicks to add to my party of internet writers I would be conversing with over a Saturday morning of roasted hojicha tea. Instead, I clicked once. Just once. And I’m glad I did.

Andrew started writing again. Pen to paper. Or rather, finger to keyboard. And that, that was worth celebrating. I, like many of his other friends, had been starved, deprived, relieved of his prose given his busy schedule. In it, he postulated the relationship between commitment and conviction.

“Commitment helps you stay on the path. Conviction is what calls you to the path in the first place.”

In sum, the pre-requisite for commitment is conviction. And so, it got me thinking about the source of conviction…

From inspiration

For decades, athletes have tried to break the 4-minute mile. According to British author John Bryant, since 1886. “It had become as much a psychological barrier as a physical one. And like an unconquerable mountain, the closer it was approached, the more daunting it seemed.”

But it wasn’t till May 6, 1954, did Roger Bannister break it with a time six-tenths under the mark. As soon as Bannister did it, 46 days later, another did. One year later, three runners broke the once elusive 4-minute barrier in one race.

The thing is, nothing technological had changed in the world when all these runners post-Bannister broke the four minutes. Nutrition hadn’t drastically improved. Neither was there drastic evolution in the technology of shoes. Yoram Wind and Colin Crook argues it was a mindset shift. The impossible was possible.

We see the same notion today in the world of emerging markets. In these markets, the first wave of unicorn founders is usually spearheaded by Harvard and Stanford grads building X for Latam or Y for Africa. For instance, both of Grab’s founders are HBS graduates. Gojek’s Nadiem is no exception. Nubank’s David Velez holds a similar Stanford GSB degree. So does Cabify’s Juan de Antonio. Rappi’s founders are also Stanford alumni. And the list goes on. They come with the Silicon Valley mindset in a market underestimated by not only the broader world but by the homegrown talent themselves. I like the way a Midwest founder-turned-investor once put it, “My mind is in Silicon Valley, but my feet are in the Midwest.” The same is true for this first wave.

And once they’ve proven it’s possible to reach unicorn status, the second wave follows quickly after.

Most people follow in the footsteps of our predecessors. Older siblings are the same for their younger siblings. Parents are that for their children. While I’m not a parent yet myself, I do aspire to be that for my children. Equally so, that’s why we need diverse representation in media, in positions of power, and in stories.

For many, conviction comes from examples to disprove the limitations of our own imagination.

From emotion

For a handful of others, conviction comes from a deep desire to prove or disprove.

There’s a superpower that comes with being underestimated. Reddit’s founders famously hung on the office walls the words of a Yahoo! exec who told them,  they were nothing but a “rounding error.”

When Michael Phelps’ eight gold medals in Beijing were on the line, their coach Bob used what the French team was boasting on the papers as motivation in the locker rooms. “The Americans? We’re going to smash them. That’s what we came here for.” And soon after, the world was blessed with one of the greatest races to date. A race of which the Americans — the underdogs — pulled a miraculous spectacle of conviction and resolve.

For founders, you need obsession, not just passion. Many of the best ones have a personal vendetta — a deep, unquenchable desire borne out of time spent in the idea maze. Every successful founder needs to perform 10-15 miracles in the startup to household name journey. Trials by fire that are meant to deter the fainthearted.

After chatting with a number of limited partners (LPs, folks who invest in venture funds) over the past two months, I’ve realized the thread of founder obsession continues here. That investor-market fit is not just a function of professional experience but also of life experience. Once again, a deep desire to change the world from personal frustrations and the hope that no one will ever have to go through what they went through.

In closing

Earlier this year, Reed Hastings shared a profound line with the graduating class, “[stories are] about harnessing the human spirit.” Conviction starts from the story we tell ourselves. The story itself is bound by the limitations of our own imagination. And conviction happens to be the belief that we can will our imagination into existence.

Michelangelo once said, “The sculpture is already complete within the marble block, before I start my work. It is already there, I just have to chisel away the superfluous material.” Commitment is the dedication to your conviction. A devotion to say no to distractions and yes to the person you want to be.

We live in a world filled with shiny objects. So, ask yourself, do you want what others want? Or what you truly want? Is your conviction inherited or innate?

I was listening to the latest episode of the All-In podcast, and David Friedberg echoed a similar notion for the greater human race, “What differentiates humans from all other species on Earth is our ability to tell stories. A story is a narrative about something that doesn’t exist. And by telling that narrative, you can create collective belief in something. And then that collective belief drives behavioral change and action in the world.”

Photo by Devin Avery on Unsplash

#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost). Who knows? The possibilities are endless.

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.

Posted on

DGQ 15: Which part of your past are you rebelling against? Which part are you running towards?

rebel

I forget where I heard this recently, but I thought it was a great breakdown of how we are all a function of our past.

When I first jumped into the action-packed world of venture, the most daunting part of the job wasn’t the spreadsheets or the modeling or asking great questions to founders or being a thought leader. It was the seemingly sustained extroversion that was necessary to be successful in the field.

Everyone, but especially the best investors, seemed naturally extroverted. And, well… I wasn’t. And neither did I want to be. To me, being an extrovert just seemed so exhausting. That said, it didn’t mean I didn’t enjoy every second chatting with amazing founders and investors. I was just — still am — the person who taps out two hours into a party. Three, max. In fact, I used to be a stereotypically shy introvert back in grade school. Comfort and safety were my best friends.

So, the reason I’m sharing all this in the first place is that we are all a product of our history. In the world of startups and VC, it seems like the best founders and investors were born extroverted and with great charisma. They were daring, rebellious, and ambitious from the start. They have these wild stories of how they broke the rules as kids and how each of those anecdotes made them who they are today. And somehow they turn each of the afore-mentioned into great Twitter threads. But I digress.

I, for one, have not had those same experiences. But when I finally entered college, I let what would have been some of my most formative experiences slip through my fingers – a freshman year crush, the opportunity to invest in a classmate who became a world-class founder, just to name a few. All of the above opportunities I was deeply curious about but didn’t have the courage to speak up. And I beat myself up over it. So today, my spurts of extroversion isn’t a trait I was born with, but motivated by the deep regret I used to and probably still do carry of my past inability to seize the moment. A past I am rebelling against.

And I know I’m not alone. Having chatted with numerous introverted founders and investors I deeply respect, I know I’m in good company. For those reading who fall under the same cohort, you are too. We just don’t speak out much, so it may be hard to tell that we exist. Of course, this is only one example among many in a cosmos of life experiences and characters.

So, as you’re charting your life’s journey and sharing it in an interview, coffee chat, or fundraising pitch:

Which part of your past are you rebelling against? Which part are you running towards?

And be honest. If you can’t be with the world, be so with yourself.

As a result of writing a soon-to-be-published blogpost on how limited partners (LP) think about investing in VC funds, one LP shared a similar line of thinking. For emerging fund managers (equally true for founders), why does this product/space mean so much to you? The answer isn’t just because you worked X number of decades in it, but something more fundamental. If you don’t have one, you might find your founder-market fit elsewhere.

Photo by Yeshi Kangrang on Unsplash

The DGQ series is a series dedicated to my process of question discovery and execution. When curiosity is the why, DGQ is the how. It’s an inside scoop of what goes on in my noggin’. My hope is that it offers some illumination to you, my readers, so you can tackle the world and build relationships with my best tools at your disposal. It also happens to stand for damn good questions, or dumb and garbled questions. I’ll let you decide which it falls under.

Subscribe to more of my shenaniganery. Warning: Not all of it will be worth the subscription. But hey, it’s free. But even if you don’t, you can always come back at your own pace.

Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.

Posted on

#unfiltered #69 Maintaining Composure

meditation, zen, silhouette

When I was in New York last week, I had the fortune of catching up with one of my favorite people inside the rustic walls of Il Buco. Needless to say, an hour and a half was not enough to contain months of development and change. So, to continue our tea, the next day, after she met up with the one of the heavyweights in her industry, she asked:

“How do you keep your enthusiasm in check but show it to the extent that shows respect to the person and also have a conversation as equals?”

In sum, how do you fangirl/fanboy without losing your composure?

I don’t. It happens less frequently now, but I still do.

In fact, even when I try not to or attempt to convince my conscious self, this is just another human being doing their best to live the life they want, there’s something that my eyes do without fail every single time. Here’s to hoping it’s not painfully obvious to the other person.

In fairness, I actually don’t know what I look like when it happens. I can just feel and SEE it through my eyes every time. In fact, I don’t even know what this phenomenon is called. Or if there’s a word for it. If I were to describe it, it’d be if the thousand-yard stare and diplopia had a baby.

It’s completely involuntary. All my other senses and cognitions work just fine. And when it happens, I start blinking a lot more which usually recalibrates my gaze.

Physiological response aside, over time, I’ve simmered down my ability to respond into two ways, especially when my brain decides to turn off. One for each situation.

  1. I’m prepared. For instance, this is a scheduled meeting, or I know I will see this person at an upcoming event.
  2. I’m unprepared. The canonical serendipitous elevator ride. For instance, bumping into them at an event. Or true story, we happened to both be helping to carry A/V equipment backstage post-show.

When I’m prepared…

The goal here is to know the other person better than they know themselves at the point in time. This is the same mentality I carry into both conversations in public and private spaces. The former with interviews, fireside chats, and panel discussions. The latter in the form of coffee chats, dinners, happy hours, and the like.

Depending on the timeframe, I come prepared with a different number of questions. But generally, for every 30 minutes, I come with three questions.

The first question is to establish rapport. And it’s always a personal one. I almost never start the conversation with pure “business.” This sets the tone for the rest of the conversation, as well as how candid they will be with you.

You’ll have to do your research. Some may require more digging than others. That said, don’t take it too far by finding their home address or social security number. Here, I usually look for fun facts. Like they did street dancing back in high school or they love going to stand up comedy shows.

If you’re going to take away one thing with this question, it’s to surprise and delight.

For the second one, which is usually the optional question if we’re short on time, I love understanding people’s inflection points. For example, why did they go from consulting to acting? Or from an art gallerist to a VC?

Not just the fact that they went through a massive delta, but I love understanding what they were thinking before, during and after they made the transition. Was it a decision that was supported by their family and/or peers? Was it a difficult decision to make? What got them over the activation energy to commit to this new lifestyle?

The third question is akin to the one I always advise founders to think about when talking to investors. Why would this investor be the best dollar for your cap table? Similarly, even if you’re not raising money, what kind of question can only the person in front of you answer? Or very few others can? It’s usually a function of their work or life experience, where they end up becoming uniquely positioned to talk about that topic.

As a prelude to this last question, I usually preface why this question means a lot to me. Why do I need this answer? Show that you have spent time in the idea maze. Time thinking deeply about the topic already. Naturally, anything that is googleable is off-limits here.

You have one chance to make a great first impression. Don’t waste it.

Cutting it short

Just as it’s important to start the conversation on a high note, in my opinion, it’s even more important to end the conversation on a higher note. As such, I have a three rules of thumb:

  1. Never overstay your welcome. It’s always better to cut the conversation short than to end with awkward silence. Be extremely acute to where the clock is compared to how much time you’ve asked of them.
  2. Have a go-to phrase (or phrases) to end the conversation. One of my favorites is, “As with all great conversations, we ran out of time before we ran out of topics.” (The cat’s out of the bag, so now I need a new one.)
  3. Follow up within 12 hours of the conversation with notes from the conversation, and action items on your end. For instance, if the other person shared advice with you that you solicited, be sure to act on it. Come back two weeks to a month later and share the results of your findings. As you might suspect, bring a pen and paper for the conversation. People really respect it when you take their thoughts seriously. During, and even more so, after.

    If possible, pay it forward, and when that time comes, don’t be afraid to share it with the source of the advice.

When I’m unprepared…

While still worthwhile in the former situation, you need to be able to break the ice quickly and give others a reason to listen to you for just two more minutes. People are naturally busy. And if you disrupt their normal flow of life, their whole goal while you are speaking to them is not how they can talk to you more, but about how they can get back to doing what they were doing.

Just as much as you will be unprepared, they will be too. As such, you need to disrupt their flow even momentarily. Your short 10-second bio needs to generate emotion and curiosity. Oftentimes, that is not your title. For instance, one that I like using with folks who I know to be lighthearted and have no context to the startup world is, “I get paid to be the dumbest person in the room.” Self-deprecating humor really does help for folks who can and have time to take a joke.

Other than your short bio, always have 2-3 questions handy via muscle memory that are good to ask in almost any situation AND would give you immense insight. I’ll share one of mine, and likely many more in the future with my DGQ series on this blog.

In your line of work, what differentiates the great from the good? Not just the good from the bad, but how do I tell the very best from the ones that have yet to get there but are still a cut above the rest?

Practice these again and again. In front of a mirror. In the shower. Or while you’re driving. Until they become second nature.

In closing

The important thing to remember is these people don’t owe you anything. And sometimes, while you can’t give them what they want, you can make that amount of time you have with them amusing. Insight doesn’t just come in the form of answers but also questions that get others to think in ways they didn’t before. Going back to one of my favorite Kurt Vonnegut lines:

“Use the time of a total stranger in such a way that he or she will not feel the time was wasted.“

Photo by RKTKN on Unsplash

#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost). Who knows? The possibilities are endless.

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.

Posted on

#unfiltered #68 Staying Humble

I am by no means the best equipped to talk about this topic, nor have I achieved any modicum of success that I can call my life’s work yet. But the beauty about being insatiably curious is that I’ve gotten to know some incredible individuals, like…

  • Multi-time New York Times best-selling author
  • Founder of a household corporate brand
  • Investors who have consistently returned their investors over 10 times their investment
  • Individuals who have achieved insane, superhuman feats (i.e. climbing Mt. Everest, Olympic medalist, etc.)
  • Creator of a popular TV show
  • Chefs will multiple Michelin stars
  • A mother who serves as the role model for her children
  • A war refugee turned serial venture-backed founder
  • A veteran with multiple Purple Hearts

Unfortunately, while this isn’t true for all world-class performers I’ve met — to borrow one of Tim Ferriss’ phrases, many continue to stay curious, studious, restless, and most of all, humble. For those who continue to stay humble, how do they do it? After all, they have every right down to their bone to exhibit a large ego. To be full of themselves. They’ve made it.

What powers their humility? A question I find fascinating and telling of character.

Admittedly, I wish I could’ve been less obtuse about how I asked the above question.

After a number of conversations over the years, there are four chief themes:

  1. Their greatest achievement is still ahead of them. They know what is possible, and continuously seek the adrenaline of doing the impossible. As long as the impossible is ahead of them, they are fighting a war against antiquated, yet widely-adopted mindsets. And the thing with the impossible is that it’s impossible to do it alone.
  2. They fear they are unable to outdo their last greatest achievement. That fear either slides into depression or a burning fire to prove themselves wrong. That fire continues to keep them on their feet, anxious of the day they disappoint others, but most of all, themselves.
  3. They have friends and family they deeply trust. They value the opinion of their confidants to keep them grounded. Confidants who prevent the hype get to the individual’s head, without discounting his/her achievement.
  4. They themselves meet with exceptional people who show them the world is bigger than their pond. Exceptional people who challenge what they themselves know and what they think they know, helping them realize the limitations of their own world.

Regardless of what stage of life we are at, I believe there are life lessons here for everyone else as well.

  1. Your greatest achievement is ahead of you. Don’t spend too much time on the past, even if you are proud of it.
  2. Find a support group who’ll be with you even when times are tough — when your faith in yourself falters.
  3. And, hopefully that same support group of friends and family will keep you grounded, even when the world tells you, you are a god.
  4. Meet with people who challenge you, who inspire you, and who motivate you to act.

Of all the above, I’d love to double-click that last lesson in particular. There are two kinds of lives that great people live:

  1. A life to envy
  2. Or a life to respect

A life to envy is a life you would love to live instead of your own. It is often easier and more privileged than your own. A life born with a silver spoon in their mouths already. And if not that, a life of fairly few struggles or of extreme luck uncorrelated with their ability to hustle. These individuals often live only briefly in the limelight and find it difficult to repeat the “success” they’ve had. For instance, winning the lottery or being born into a well-off family.

A life to respect is a life where the individual overcomes seemingly impossible odds. One built with sacrifice — blood, sweat, and tears. It wasn’t an easy one. But where they are today is a testament to the scar tissue they’ve built over the course of their life. There are chapters in these lives that could and would rip apart the average person. This life is a life best viewed in a cinematic theater, but not one most people would want to live themselves, even though the status quo may be something they desire for themselves. I often find the world’s best founders in this category. And these lives often stand the test of time.

Most of these people won’t forget the past they came from. They continue to have insatiable curiosity and a bias to action. As such, they continue to learn at an astonishing pace. They continue to inspire us and motivate us to be better. And even before they succeed, many of their peers who don’t join them for the perilous journey merely comment on how they’re “built different.”

These are the same people I love spending time with. And hoping that when I do “make” it, I won’t forget their wisdom.

Photo by Joshua Earle on Unsplash

#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost). Who knows? The possibilities are endless.

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.

Posted on

The Eight Rules of Great Pitches

Over the week, I was revisiting some of the Instagram posts that I had saved over the years, and I re-discovered one of my favorites by Christoph Niemann sharing his kudos to the late Kurt Vonnegut.

Most of all, Vonnegut’s advice on writing applies just as much to other forms of storytelling. And if you know me, I was immediately reminded of pitching.

  1. Never waste someone else’s time.
  2. Give the listener someone to root for.
  3. Every character should want something, even if it’s a glass of water.
  4. Every sentence must do one of two things — reveal character or advance the action.
  5. Start as close to the end as possible.
  6. Be a sadist. Show awful things that happened to the characters.
  7. Write to please just one person. Don’t get pneumonia.
  8. Give your readers as much information as possible as soon as possible.

Never waste someone else’s time.

Teach your investor something they didn’t know before.

A lot of investors claim to be experts, and even more are seen as experts. Too often, founders blindly listen to what their investors tell them to do. As Hunter Walk of Homebrew once said, “Never follow your investor’s advice and you might fail. Always follow your investor’s advice and you’ll definitely fail.”

YouTuber Derek Muller just came out with a great video on the ideal variables that manifest expertise. Two of such variables are:

  1. Valid environments – environments that are predictable and have minimal attribution to luck
  2. Quick feedback loops

The problem with venture is that our feedback loops are incredibly long and drawn out. Oftentimes, it takes 7+ years to fully realize any kind of financial outcome, although there are many red herrings of outcomes in between, like new funding, brand-name investors, users (rather than customers, or people who actually pay for your product), mass hirings, and so on. Because our feedback loops are slow and luck plays a huge role in success, it’s hard to differentiate true experts in the field. All that to say, every investor is learning to be better, to have more data, to make better judgments than the next.

And if you can show that you know something worth our time again and again, it’ll be worth paying our tuition money to you.

That said, I don’t want to discount how some investors can be really helpful in particular areas that have valid environments and fast feedback loops. For instance, code, A/B testing distribution strategies, ability to help you raise your next round within a certain timeframe, or get you into Y Combinator. The determinant of success in the afore-mentioned has clear KPIs versus their own financial success in the fund.

Give the listener someone to root for.

Aka you. Why you?

Mike Maples Jr. once said, “We realize, oh no, this team doesn’t have the stuff to bend the arc of the present to that different future. Because I like to say, it’s not enough. […] I’d say that’s the first mistake we’ve made is we were right about the insight, but we were wrong about the team.”

“I’d say the reverse mistake we’ve made is the team just seems awesome, and we just can’t look past the fact that they didn’t articulate good inflections, and they can’t articulate a radically different future. They end up executing to a local maximum, and we have an okay, but not great outcome.”

There’s a category of founders that are going to win no matter if an investor chooses to invest or not. Most typically like riding this train. They have to do little to no work to be recognized as a great investor.

Then, there’s the cohort of founders that may or may not win on their current idea, but their investors really, really, really want these founders to win. These founders are the underdogs. They’re also the ones with often the craziest of ideas. Even more so, they’re the ones that if they win, these founders will redefine the world we live in today.

As a founder, you have two jobs when fundraising:

  1. You need to find the partners who really, really want you to win. As the great Tom Landry says, “A coach is someone who tells you what you don’t want to hear, who has you see what you don’t want to see, so you can be who you have always known you could be.”
  2. You need to give these partners the ‘why.’

And I promise you that ‘why’ is not because of straight facts, but because of a story. Why should people help you get what you deeply want?

Every character should want something, even if it’s a glass of water.

Speaking of what you deeply want, almost every founder I chat with pitches me their raison d’etre. A selfless reason to cure the world of cancer. Metaphorically speaking, of course. That’s cool. You can tell that to the press. It’ll make great PR.

Rather I care about the exact opposite. What is your selfish motivation? This is a question I personally like asking founders. Your selfless motivation keeps you going during the day, during peace-time, when things are going just right. Your selfish motivation keeps you up at night, when s**t gets tough. When no one else believes in you except for yourself.

I want to know that you want that so badly, that you’re able to go the distance. And if that same thing is something that your investor can relate to, then you have a match made in heaven.

Every sentence must do one of two things — reveal character or advance the action.

Let me revise the above. Every slide must do one of two things — reveal character or advance the action. Anything else is superfluous. That means, outside of your core slides — problem, solution, action plan/financial projections, rising conflict (aka competition, blockers and risks), and your team slide, everything else is superfluous. Or at least, save it for your data room.

I’m sure some investors would debate me on this, but every investor has a slightly different framework. The above is my own perspective. That said, every slide should give an investor 10% more conviction towards investing in your business — capping out at 70%. ‘Cause after 70, any additional information (in the first meeting) has diminishing returns.

Start as close to the end as possible.

No investor cares about which hospital you were born in, but they do care about when the fire first started. And they care about your inflection points, even if that’s still ahead of you.

Be a sadist. Show awful things that happened to the characters.

Grit is one of the hardest founder traits to measure over a 30-minute meeting. Even after prolonged and deliberate interaction, most of the time it’s still hard to grasp this amorphous quality. But if you ask most investors what is the number one trait of a great founder, it’s either grit or passion. The latter of which often serves as a proxy to grit.

If you’re regular here, you know one of my favorite quotes of late is Penn and Teller’s. “Magic is just spending more time on a trick than anyone would ever expect to be worth it.“

Past performance is not a predictor of future progress. But it really does help. A lot. In a startup’s lifespan to becoming a leading business, there are 10-15 trials by fire. And for each one of those, the founders are required to pull off nothing short of a miracle. In fact, this next year will be exactly one of those tribulations for 99.9% of companies.

So, show moments in your life where you were able to pull off a miracle. And a miracle, by definition, is when the odds are heavily stacked against you.

Show excellence. Walk your listeners — your investors — through the journey of how you tasted glory. How you were able to achieve the seemingly impossible. Personally, this is why I love backing professional athletes, veterans, and chefs. Three fields (of, I’m sure, many more) that you really need to eat s**t to be one of the greats.

Write to please just one person. Don’t get pneumonia.

Every pitch should be tailored. Why would this investor be the best dollar for your cap table?

No investor (even if it’s true) wants to be just another investor. They want to be THE investor. Make them feel special. When you propose to your partner for marriage, you tell them why they’re the one for you, not why you’re the one for them. You get down on one knee and tell them why they are amazing. Not the other way around.

Give your readers as much information as possible as soon as possible.

The one-liner matters. It is the first point of interaction with your startup, and oftentimes, may be the last. Don’t shroud it in mystery and jargon. If you’re ever stuck here, remember Brandon Sanderson‘s First Law of Magic:

“Your ability to solve problems with magic in a satisfying way is directly proportional to how well the reader understands said magic.“

Equally so, the subject line of a cold outreach email serves the same purpose. This is especially true, when you’re reaching out to someone who you can reasonably assume has hundreds of emails in their inbox per week. For reference, and for the most part I’m a nobody compared to the partners at a16z of Lightspeed or Benchmark, and I get about 50 cold inbounds per week.

So, in my opinion, your subject line should have no buzzwords (well, because everyone’s using them). Think of it this way. Say you’re an author selling your new self-help book. And say your greatest distribution channel are likely bookstores in airports. If everyone in the self-help section has an orange cover with bold blue words, you want to be the one black and white cover book. And if everyone has black and white sleeves, you bring out the neons.

In the context of email subject lines, instead, you should include numbers. What is the one metric that you are killing it at? Just like what I recommend folks write in their email forwardables. Instead of “Invest in the Leading BNPL Solution in Latam”, use “BNPL startup growing 50% MoM”. Give the exact reason why your investor should be excited to invest in your company. Don’t save it behind eight clicks — Email, Docsend link, and another six clicks to get to the slide of importance.

People can only tell different, not better, unless it’s 10x. Mediocrity is a crowded market, so don’t waste your time there. Taking a quote out of Pat Riley‘s book, “You don’t wanna be the best at what you do; you wanna be the only one who does what you do.”

In closing

Storytelling is an emotional discovery. The facts don’t change, but a great pitch or story weaves seemingly disparate facts into a compelling narrative. One that inspires action and draws curiosity. In a saturated world of attention, you are fighting for minutes if not seconds of someone’s time. Make it valuable.

Photo by Daniel Schludi on Unsplash

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.

Posted on

DGQ 14: Why does the world need another venture fund?

rock, big rock, small rock

If you’ve been following me on Twitter recently, you might have noticed I’m working on a new blogpost for the emerging LP. One that I’m poorly equipped personally to talk about, but one that I know many LPs are not. Hence, I’ve had the opportunity to sit down with a number of LPs (limited partners – people who invest in venture funds) and talk about what is the big question GPs need to answer to get LP money, specifically institutional LP money.

And it boils down to this question:

Why does the world need another venture fund?

Most LPs think it doesn’t. And it is up to the GP to convince those LPs why they should exist. For most institutional LPs, even those who mean to back emerging managers, to invest in a new manager, they have to say no to an existing manager. While data has historically shown that new managers and small funds often outperform larger, more established funds on TVPI, DPI, and IRR, when institutional LPs invest in a Fund I, it’s not just about the Fund I, but also the Fund II and Fund III.

For those who reading who are unfamiliar with those terms, TVPI is the total value to paid-in capital. In other words, paper returns and the actual distributions you give back to LPs. DPI, distributions to paid-in capital, is just the latter – the actual returns LPs get in hand. IRR, internal rate of return, is the time value of money – how much an LP’s capital appreciates every year.

It’s a long-term relationship. Assuming that you fully deploy a fund every three years, that’s a 19-year relationship for three funds. Three years times three funds, with each fund lasting ten years long. If you ask for extensions, that could mean an even longer relationship.

But the thing is… it’s not just about returns. After all, when you’re fundraising for a Fund I, you don’t have much of a track record as a fund manager to go on. Even if you were an active angel and/or syndicate lead, most have about 5-6 years of deals they’ve invested in. Most of which have yet to realize.

So, instead, it’s about the story. A narrative backed by numbers of what you see that others don’t see. Many institutional LPs who invest in emerging managers also invest directly into startups. I’ve seen anywhere from 50-50 to 80-20 (startups to funds). And as such, they want to learn and grow and stay ahead of the market. They know that the top firms a decade ago were not the top firms that are around today. In fact, a16z was an emerging fund once upon a time back in 2009.

Of course, anecdotally, from about 15-ish conversations with institutional LPs, they still want a 4-5x TVPI in your angel investing track record as table stakes, before they even consider your story.

Over the past two years, capital has become quite a commodity. And different funds tackle the business of selling money differently. Some by speed. Others by betting on underestimated founders and markets.

The question still looms, despite the cyclical trends of the macroeconomy, what theses are going to generate outsized alphas?

And synonymously, why does the world need another venture fund?

Photo by Artem Kniaz on Unsplash

The DGQ series is a series dedicated to my process of question discovery and execution. When curiosity is the why, DGQ is the how. It’s an inside scoop of what goes on in my noggin’. My hope is that it offers some illumination to you, my readers, so you can tackle the world and build relationships with my best tools at your disposal. It also happens to stand for damn good questions, or dumb and garbled questions. I’ll let you decide which it falls under.

Subscribe to more of my shenaniganery. Warning: Not all of it will be worth the subscription. But hey, it’s free. But even if you don’t, you can always come back at your own pace.

Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.

Posted on

The Secret to an Epic One-Liner

one liner, focus

When asked to write a complete story in just six words, Earnest Hemingway famously said, “For sale: baby shoes, never worn.” Six. Simple. Words. Words that even a first grader would understand. One can extrapolate profound meaning through not only what is explicitly said, but also what is implicitly not said. In fact, arguably, the impact of such a short statement is not in the former, but in the latter. Some people call it a hook. Others, a teaser. On YouTube, clickbait. In the world of startups, the one-liner.

I’ve written about the power of the one-liner before, as well as shared it many a time with founders at Techstars, Alchemist, CSI Tech Incubator, WEVE, and during my own office hours. Most founders I see focus on the whole pitch deck. Smarter founders focus on selling the problem and why it means a lot to them. The smartest tell a simple, but powerful story. Focus comes not from a surplus of information, but an intentional deficit. One of my favorite examples of focus comes from mmhmm’s pitch deck – the very same one that led to $31 million in funding pre-launch. While not every founder is as fortunate to have the accolades that Phil and his team has, what every founder can have is the same level of precision and focus.

Hence, quite literally, the one-liner wields an underestimated, but extraordinary power to focus.

Most founders fall in two camps. Camp A, they come up with their one-liner haphazardly – often an abbreviated and diluted version of their more complete product description. In Camp B, they fill their one-liner with every buzzword imaginable in hopes of capturing the attention of investors and customers alike.

And well… I lied. There’s a Camp C, which is some amalgamation of Camp A and B. Rather than the best of both worlds, it’s the worst.

Camp A – Brevity via dilution

Founders here try to cover as much ground as possible, using as little words as possible. If you fail, you’re left with holes in your logic, which leave your investors in confusion. And any doubt left uncovered is a recipe for rejection.

If you somehow succeed, in combining three words into one and five words into two, you leave yourself open to sounding generic.

Camp B – Sounding smart

Your one line may seem special in the moment. You’ve hit every keyword that an SEO consultant would suggest. And Google is without a doubt going to pick up on it. Seemingly so, you’ve done everything right. But for everyone who will pick it up, the only people who won’t are the people who matter. Your initial customers and your first investors.

The companies who can afford to be generic are those who have won already. The big names. Google, Facebook, TikTok, Slack. You don’t need to define what Google or Slack is to the average person. Their target audience knows exactly what you mean without you explaining it. Last I checked, Slack’s slogan is to be your “digital HQ”, which makes complete sense, given their product, but it wasn’t always that way. Slack started off as the “Searchable Log of All Communication and Knowledge” – Slack for short. And at one point, Stewart Butterfield called email the “cockroach of the Internet.” But it’s because of such provocative statements, like the latter especially, that capture the world’s attention. As such positioning in a one-liner is paramount.

You, on the other hand, assuming you’re a founder that is still very much pre-product-market fit, are fighting an uphill battle. You’re an outsider. And as such, you need to elicit emotion and curiosity in one line. Jargon just won’t cut it. It might get your investor to click on your email, and maybe even a first conversation, but rarely an investment.

Why? You’re competing with every other team that is using that exact same permutation of buzzwords. And trust me, it’s a lot. The reality and the paradox is you’re not unique, neither is your idea, until you can prove you are.

The importance of the one line

There are three kinds of investors that are immediately impacted by your one-liner, in the order of least to most impacted:

  1. Angel investors
  2. Conviction-driven firms
  3. Consensus-driven firms

As a function of their check size, angel investors make decisions quickly. Subsequently, if you can nail your 30 minute chat, their memory of you isn’t likely to atrophy over 48 hours, or until they come to an investment decision. Angels also often make their investment decisions on gut, rather than deeper diligence that firms are known for.

Why? Diligence costs money, in the form of legal fees, and time. The latter comes in the form of opportunity cost. If they’re an operator angel – a full-time founder or operator and part-time angel, they won’t have the time to spare on doing additional homework. If they’re a full-time angel, they have their hand in so many startups that spending more time on you, the founder, is keeping them from making other great and quick decisions in other founders. At the same time, many – I dare even say, most – angels index more on “signal” than actually what you’re building.

Equally so, it is also in the nature of conviction-driven firms (firms where each partner has complete jurisdiction over their investment decisions), and solo GPs, to make decisions quickly.

The party you do have to worry about is consensus-driven firms – firms that require consensus from the partnership to move forward on a decision. This is equally true for SPVs and syndicates. Here, you are playing a game of telephone – from coffee chat to partnership to second meeting to partnership meeting (if not more). With every step of friction, the likelihood for drop-off increases. The last thing you want is for your startup’s purpose and product to get lost in translation between people who haven’t even had the chance to touch it yet.

And in all of the above instances, relaying intention, not jargon, is your most powerful tool in your toolkit. What is the query or problem that your customers/users have? How can you address in the simplest but most understandable way possible?

I’ll elaborate.

The one-liner in practice

Years ago, when I first started in venture, I had the serendipity of interviewing a bike-sharing startup for the purposes of an investment opportunity. And I remember asking the founders what they did. To which, they replied, “We make walking fun.”

Needless to say, I was quite perplexed. I knew exactly what they were trying to solve. They weren’t a shoe company or a fitness app or a pedometer. The world had already seen first movers in China and India tackle this problem, but it had yet to reach the Western world by storm.

And the founders laid it out quite simply. If I chose not to take a 10-minute walk to a friend’s house, assuming I had both, would I rather drive 2 minutes, or take a 5-minute bike ride? Expectedly, I picked the latter. Rather than competing with cars which had become a rather saturated market, and neither of the founders had the chops to build a self-driving one, it’s much easier to compete with an activity everyone is forced to do – no matter how rich or poor you are. The equivalent of what Keith Rabois calls a “large, highly fragmented market.” Albeit, maybe not with the lowest NPS score out there.

Unsurprisingly, it became one of my favorite stories to share, and one I swiftly shared with many investors then. They’ve since become one of the most recognizable unicorns around. But for now, I’ll refrain from sharing the name of the company until I get permission to do so.

Lenny Rachitsky also recently came out with an incredible blogpost, which includes the one-liners of some of the most recognizable brands today, like Tinder, Uber, Instagram, and more. In the below graphic from that blogpost, you’ll realize not a single one has any jargon in it.

Source: Lenny Rachitsky

Positioning

The words you subsequently use in that one line determine where in the competitive landscape you lie. For instance, in the scope of messaging products, if I say email, you immediately think of Gmail or Superhuman. If I say instant messaging, you think of text, Messenger, or Whatsapp. If I mention corporate or work, you think of Slack. All of the above are messaging products, but how you frame it determines its competitors.

I’ll give another example. Say, calls. If I say call, you think of phones. On the other hand, if I say meeting, you think of Zoom or Google Meet or Microsoft teams. And if I say casual call, you think of Discord.

Your competitors aren’t who you say they are; they’re who your investors think they are.

The goal of the one-liner

The greatest one-liners elicit:

  1. Emotion
  2. Curiosity

While they should do their job of describing your product, your one-liner is your CTA. For customers, that’s downloading the app, or jumping on a sales call. For investors, it’s so that you can get them to open your pitch deck or take the first meeting. Don’t skip steps. Your one-liner won’t get you a term sheet. So, don’t expect that it will.

Your goal is to tease just enough that investors become curious and get over the activation energy of requesting or scheduling a call.

To summarize a point I elaborated on in a previous blogpost on the psychology of curiosity, there are five triggers to curiosity:

  1. Questions or riddles (i.e. a puzzle they can solve but others can’t)
  2. Unknown resolutions (i.e. cliffhangers – though not something I’d recommend for a one-liner, you’re running on borrowed time)
  3. Violated expectations (i.e. the afore-mentioned bike-sharing startup)
  4. Access to information known by others (i.e. FOMO)
  5. And reminders of something forgotten (i.e. empathy when they were founders or in the idea maze)

To share a few more examples, using Lenny’s list of one-liners:

  1. Violated expectations – Dropbox, Uber, Duolingo
  2. Access to information known by others – Tinder, Spotify, Amazon, Zillow
  3. And reminders of something forgotten – hims, Pinterest

Just like any other human, investors are prone to all of the above. Use that to your advantage. And as you might have suspected, your one-liner depends on your audience. Different people with different goals and different backgrounds will react to different triggers.

In closing

There’s a fine balance between clickbait and a great hook. A balance of expectations versus reality. If you were to take anything away from this essay, I’ll boil it down to three:

  1. You should promise just enough to get people excited and curious, but not more to the point where the reality of your actual product, or even your pitch deck, is disappointing.
  2. Less is more. The simpler your one-liner is, the easier your message will spread. No one will remember the exact words of your 7-minute pitch.
  3. Have some element of shock value to elicit curiosity – not only initially with said investor, but also with others he/she will share with.

Photo by Anika Huizinga on Unsplash

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.

Posted on

How Do You Know It’s Time To Let Go?

alone

I’ve been asked by many founders over the years, “How do I know it’s time to let it go?” And every single person asks me for some length of time. When I tell them I don’t have an “optimal” length of time that would do the question justice, they ask: “When do you usually see other founders you work with let go?” To which, the answer spans as far as the Pacific Ocean. I’ve known folks who work on it for six months before they called it quits. Others for seven years, without external validation. And then some who continue at it past the decade.

Who’s right? Who’s wrong? If I were to be honest, I don’t know. Rather I’ve always believed the independent variable here shouldn’t be time, but rather your emotional state. I’ll elaborate.

The “ideal” emotion to quit with

There’s a timeless apologue about a boiling frog. If you put a frog in boiling water, it’ll jump straight out. But if you put a frog in lukewarm water and slowly increase the heat, it won’t realize it’s dying until it’s too late. It goes to say that the more time you spend in the forest, the harder it is to see the forest itself. As such, this essay is for everyone who is stuck in the forest.

Andy Rachleff of Benchmark and Wealthfront fame has this great line. “I’d love to kill it and I’d hate to kill it. You know that emotion is exactly the emotion you feel when it’s time to shut it down.”

I really love this line because loving to kill something and hating to kill something are on two sides of a spectrum. Oftentimes, if you’d love to kill something, that means you haven’t spent enough time on it. It’s easy to give up on something you care little to nothing about. On the flip side, if you’d hate to kill something, you’ve spent too long on it. Often, an example of sunk cost fallacy. And it’s when these two distinct emotions meet at twilight that you know you’ve put your best effort in. It’s when you feel both of these emotions simultaneously that you can finally let it go.

As I rounding out this blogpost, I thought I’d post on Twitter to tap into the world’s greatest minds alive on Monday. And when my friend Sara shared the below line, I knew she had something better. Something I did not know that I would be remiss not to double click on.

So I did. And I promise the next few paragraphs from deep within Sara’s mind will change the way you think about quitting.

“You’re not a quitter, but you needed to quit a long time ago.”

“One of the things I learned over the years is that your intuition is probably right. It’s hard to trust though, especially when there is a lot of chaos or noise. Anything unstable from market turbulence to a toxic relationship creates that noise. You need to find quiet time to let your mind relax enough to think clearly. 

 “Sometimes if you’re anxious, it is hard to be in a spot that’s quiet or still. Don’t feel obligated to be in Zen meditation mode. Personally, I’m not someone who can be still. Instead, I find my quiet time when I walk and think around the water, where I live a block from.

“When I find myself caught between a rock and a hard place, I find myself asking the below questions with neither judgement, shame or guilt:

“If this problem was a house fire, what is my first instinct? If I stay, am I going to get swallowed up in it? Do I want to get a hose to put it out or do I want to add gasoline to it?

“If the answer is gasoline, is it because you’re beyond frustrated? If the reaction is to dump more gasoline, roast marshmallows, and walk away, that means it’s the point of no return. It’s time to quit or bring in someone else to get a fresh perspective. In these situations, the individuals involved tend to want to pick fights out of frustration. They’re combative. They can’t see any way through the problem, and they’re exhausted. It’s time to step away at least temporarily.

“In scenario two, if I’m just sitting there and watching the fire burn while I think about it, I’m stuck in indecision. Create a list of pros and cons, and really think critically about it. If you’re in a team situation, you need to figure out where the rest of your team stands and what the core problem is that needs to be solved in order to be successful. Sometimes it’s a team shift. It’s just one person who wants to call it quits, and the others want to keep going. If you’re in a relationship, you need to be completely honest with yourself and each other about what you both need to do to get things back on track and if you actually want to. The hard part about a slow burn is if you just stay stuck, you have a hard time recognizing when it’s too late.

“Thirdly, there’s the situation where I am motivated to look for the hose. I want to fight the fire. You need to think about what you actually need to do in order to fix the problem. If you’re short on capital, can you extend your runway? Be it sales, outside capital, or cutting your burn. If you’re short on talent, can you bring in world-class talent? Other times, you need to ask yourself does the market really need your product in its current iteration? You need to be really honest and look at it from a third-party perspective. If you don’t know how to fix it, you can always ask others for help. It might not seem like it, but most people are willing to help. 

“The takeaway from all of this is that you have to suspend your own judgment and ego. You have to be honest with yourself. The right answer is usually the first answer. Trust your gut with what’s right.

“Sometimes the honesty will hurt. If you’re running a company, at some point, that might mean you might not be the right CEO for your company anymore.”

In closing

The hardest parts about building anything – be it a house, business, relationship, career, family, or passion – are starting it… and ending it. If most people had to pick, they’d say the former is more difficult than the latter. But if you truly love or loved someone or something, the latter is always more difficult. And while the above may not solve all your problems, I hope when the nights are the darkest, that Andy and Sara’s thoughts may light the way.

Photo by Alex McCarthy on Unsplash

Thank you Sara for sharing your thoughts with the broader world!

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.

Posted on

#unfiltered #67 How To Make Writing Easy For Those Struggling

writing

A founder looking to write more long-form recently asked me, “What does your writing process look like?” As I was sharing my long answer to her short question, I realized, “Holy f**k, my writing process sure has evolved over the past few years.” In an effort to encase my current thoughts in amber, I find myself transcribing thoughts from gray matter to illegible scribblings. And from a 180-grams-per-meter-squared canvas to a two-dimensional electronic screen once again.

A trip down memory lane

I remember when my friend first asked me, “How are you able to commit to a weekly writing schedule? Aren’t you busy enough?” And I shared a secret with him. Something that one of my mentors shared with me.

Before officially starting my blog, I wrote 10 essays – a Plan B in case I ever went through a dry spell. Knowing I had the comfort of a cheat week and still having content to put out gave me the courage to continue writing every week. Almost three years later, of those 10 initial pieces, I’ve only two of the afore-mentioned. In the world of content creation, there’s a massive graveyard of creators who never make it past 10 pieces of content – be it blogposts, podcast episodes, YouTube videos, and so on. I would know. I started 3 blogs before this one. For each of the three prior to this one, I have an epitaph that made it to five or less posts.

The evolution of process

In my first year, I usually spent time conceiving a blogpost at night when I found myself to be the most creative, and editing the same one in the morning before the rooster cried to the awakening sun, when I found myself free of distraction and in peak efficiency. Yet despite a greatly industrialized process, one consistent theme throughout 2019 and 2020 was regret from publishing an essay too soon. There were multiple cases where I’d stumble on new, yet relevant information often within hours of publishing. In fact, this gnawing yarn of remorse reached such a level of prowess that I was re-editing blogposts by the paragraph on a monthly basis. Sorry to all of my early subscribers. Good news is you have your very own limited edition copies of David-jumped-the gun-again.

And so I started delaying my publishing schedules – to account for this sense of continual regret. In my current phase, I break down writing into three phases:

  1. Time to create
  2. Time to ruminate
  3. Time to edit

Time to create

One of my friends once told me the secret to creativity is to “give your brain time to be bored.” DJ, one of the most creative people I know, having worked to create some of the most iconic animations we know today during his time at Cartoon Network and Lucasfilm, and now a YouTuber with over half a million subscribed, once shared with me, “Creativity is a residue of time wasted.”

When I asked him to unpack that statement, he said, “Good ideas are gifts from the universe – fish that swim in that river. All you have to do is learn how to reach up and fish for them. And just like fishing, if you stick around long enough – if you’re patient enough, you’ll be able to catch a few. But you never know what fish you’ll reel in. Just that you will.”

And he’s right. The more time you spend moving or doing, the less bandwidth your brain has to explore new possibilities. The nuance here is not to block some amount of time every day to ideate. In fact, if you’ll allow me to be brutally honest, while it is giving yourself time to be bored, it’s too structured. And by definition, creativity, like DJ mentioned, is unstructured thinking. Subsequently, blocked time often creates unnecessary stress and anxiety to create. Especially when your mind is drawing blanks and you’re on a clock.

Instead, allocate time immediately after your brain has been given 10 or more minutes to be bored. For example, after you take a shower. Or go on a 30-minute run. Or a 20-minute power nap. Simply, even going on a 20+ minute walk helps your brain re-center and refresh. And always, always write down your ideas. No matter how awesome or lame you think it is. The more you practice the art of ideating, the more consistently better your ideas will be. Not saying that I’m the most creative person out there, but I still have “trash” ideas every so often, but at a far less frequency than when I started.

Time to ruminate

If you’ve ever bought a new car – for the sake of this essay, a black Toyota Camry – as soon as you buy it, you start noticing more black Toyota Camry’s on the street. In fact, you’ll start being able to identify the 2022 versions versus the 2021 or the 2016 ones. A combination of recency bias and confirmation bias. The same holds if you go to a new restaurant, you’ll start noticing that it pops up more in conversations with friends or as you’re scrolling through Instagram.

On the same side of the token, once you seed an idea in your brain (or better, on paper), you start realizing, there is more content and discourse in the world about said idea than you once thought. In the time I spend between creating and editing, I stumble upon or (re)discover articles, podcasts, conversations, experts in my network, just to name a few, when I give my brain time to ruminate.

I like to visualize the scene from Ratatouille when Remy is savoring the individual and collective flavors of the strawberry and cheese, unlike his brother Emile who gorges food down without a second thought. Whereas Emile loses the magic of culinary world, Remy sees what no rat has been able to enjoy prior. Simply put, be Remy! Savor your thoughts.

Time to edit

For me, editing has become the easiest, yet hardest part of writing. All I have to do is string together words and thoughts. I have all the biggest pieces on paper already, but formatting, grammar, punctuation, you name it, feels just like busy work, especially where there are so many more productive things I could be doing.

So, time to edit is akin to time to be inspired. As such, there are two takeaways I’ve learned about myself over the past three years:

  1. I edit in the early morning or late at night. No one will ping me (usually). There is no urgency to respond. Simply, no distractions.
  2. I have a Google doc (which I might share one day, but as of now, it’s a hot mess) that includes all the pieces of content that has, in the past, inspired me to feel a distinct emotion. I use this library of emotions when the content I am creating (blogpost, email, pitch deck feedback, replying to a friend who’s in a rut) requires empathy. For example…
    1. If I want to feel sad, Thai life insurance commercials are my go-to 5-minute sadness augmenters. Here’s one of my favorites.
    2. For insecurity, I like to revisit Neil Gaiman’s short blogpost on imposter syndrome.
    3. For pure inspiration and drive, Remember the Name or any of Eminem’s songs.

In closing

While I don’t timebox myself in this 3-step process, on average, writing a blogpost takes me about two to three weeks. In case your curious, any blogpost where I lead with a sentence that includes “recently” instead of a set time probably took a few weeks to come to fruition.

In effect, writing never feels like a chore. Rather, it’s inspired. Inspiring. Uplifting. And de-stressing.

Photo by John Jennings on Unsplash

#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost). Who knows? The possibilities are endless.

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.

Proudly powered by WordPress